Things to Consider Before Renting a Home You Can’t Sell?

August 16, 2011 at 6:27 PM | Posted in Real Estate News | Leave a comment
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In this difficult housing market, more and more homeowners are considering renting their house instead of adjusting the price. We strongly believe that residential real estate is a great investment and therefore can understand this thinking. However, if you have no desire to actually become an educated investor in this sector, you may be headed for more trouble than you were looking for.

Before renting your home, you should take the following steps to make sure this is the right course of action for you and your family.

Set a consultation appointment with an eviction attorney

People rent out their homes assuming that every tenant will pay the rent every month. We must realize, because of the current economy, there are millions of people not paying their mortgage. There is a chance you may rent to someone who at some point can’t (or simply won’t) pay you the rent. Understand what the legal challenges of eviction could potentially be before deciding to rent your home

Interview property managers

If you are not a full-time investor, hire a professional to handle the property. You need someone to find a qualified tenant, collect the rent and manage the problems. You don’t want to have to make collection calls. What would you say if a tenant told you that they had enough money to either buy food for their children or pay you your rent but not both? You need a person experienced with these situations to help.

You also don’t want to receive calls at all hours of the day and night regarding maintenance issues or challenges a neighbor may be creating for your tenant.

Create an honest budget

Sure, you will receive revenue in the form of rent. However, don’t forget you will also have expenses. Some of the expenses you should consider:

  • Mortgage Payment (unless there is no mortgage on the home you will rent out)
  • Property Taxes
  • Maintenance Expenses such as repairing or replacing: roof, heating/air conditioning unit, appliances, etc.
  • Insurance – Check with your insurance company who may suggest or demand that you increase your liability coverage.
repost by THE KCM CREW

Distressed Property Sales: Down… But Not Out

August 16, 2011 at 5:44 PM | Posted in Foreclosures, Real Estate News | Leave a comment
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There has been much written about the falling inventories of distressed properties in many market places. Some have looked at the decreasing percentage of distressed property sales reported by the National Association of Realtors over the last four months as a sign that we are finally cleaning out the last remnants of the foreclosures. If you look at the numbers, it could seem that way:

March: 40% of all sales were distressed properties
April: 37% of all sales were distressed properties
May: 31% of all sales were distressed properties
June: 30% of all sales were distressed properties
However, in reality the falling percentage of distressed property sales is not an accurate indicator. The reason the percentages are falling is because many homes are currently tied up in the process of foreclosure.

An article in HousingWire quoted James Zeldin, EVP Default Resource on the issue:

“I would absolutely expect an increase in inventory over the next 12 to 18 months. I’m personally expecting that a lot faster. I believe we’re going to see macro forces pushing these institutions to do more REO liquidation.”

Once these properties are cleared through the foreclosure process, the inventories of distressed homes will again increase and the percentage of sales will again begin to climb.

Bottom Line

We are working our way through large numbers of distressed properties every month. However, there are many more which will come to market in the next year to eighteen months.

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